San Bruno City Manager Connie Jackson, right, talks to the media regarding a federal indictment given to PG&E at the federal courthouse in San Francisco, Calif. on Monday, Aug. 18, 2014. PG&E pleaded not guilty on Monday to a new federal criminal indictment on an array of felony charges connected to a fatal natural gas explosion in San Bruno that could lead to a fine of up to $1.13 billion. (Gary Reyes/Bay Area News Group)
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Gary Reyes
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SAN BRUNO -- PG&E pleaded not guilty Monday to a new federal criminal indictment on felony charges linked to a fatal 2010 natural gas pipeline explosion here, and hours later, San Bruno officials requested that the state Public Utilities Commission preserve computer drives and digital data that could shed light on ties between the PUC and the utility it oversees.

The city of San Bruno, where eight people were killed in the pipeline explosion, says it's concerned that key emails, texts and other electronic documents, as well as paper documents, voice mails and handwritten notes could vanish amid a current effort by the PUC to swap out hard drives on its computers.

San Bruno City Manager Connie Jackson, and senior adviser Craig Bettencourt leave the federal courthouse following a federal indictment given to PG&E in San Francisco, Calif. on Monday, Aug. 18, 2014. PG&E pleaded not guilty on Monday to a new federal criminal indictment on an array of felony charges connected to a fatal natural gas explosion in San Bruno that could lead to a fine of up to $1.13 billion. (Gary Reyes/Bay Area News Group)
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Gary Reyes
)

San Francisco-based PG&E is charged with 28 federal criminal counts, including obstruction of justice for allegedly impeding an investigation into the explosion and violations of the pipeline safety act that led to the explosion.

"Not guilty to all counts," Steven Bauer, an attorney for PG&E with law firm Latham & Watkins, said at the brief proceeding Monday before a federal magistrate at the U.S. District Court in San Francisco. Individual employees of PG&E have not been charged in the case, and PG&E executives did not appear at the hearing.

Assistant U.S. Attorney Hallie Hoffman, who appeared for the federal prosecution in the proceeding, said the utility faces a fine of up to $1.13 billion if convicted.

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Following the hearing, San Bruno City Manager Connie Jackson requested that federal prosecutors press for creation of a California pipeline safety trust to help improve natural gas pipes statewide, and to establish an independent monitor to oversee PG&E and the state Public Utilities Commission.

"PG&E has refused to step up and take full responsibility for the explosion," said Jackson, who expressed the city's support for the government prosecution.

San Bruno officials, in a letter to PUC Executive Director Paul Clanon, said it is essential that all electronic equipment, data and documents related to three ongoing investigations into the explosion be preserved and available for public inspection.

"Any failure to assure the preservation and protection of all paper and electronic documents related to these proceedings could form the basis of criminal or civil liability for destroying evidence or spoliation of evidence," Jackson wrote in the letter.

One of the federal criminal charges alleges that PG&E deliberately obstructed an investigation of the explosion by the National Transportation Safety Board.

"Based on all of the evidence we have seen to date and our review of the new indictment, we still do not believe that PG&E employees intentionally violated the federal Pipeline Safety Act," PG&E spokesman Greg Snapper said after the hearing. "Even where mistakes were made, employees were acting in good faith."

Separately, San Bruno pointed out that a series of emails between officials with the PUC and PG&E show a cozy relationship between the two organizations.

The latest suggestions of an improper relationship are linked to a cancelled symposium on gas safety sponsored by the state government. PG&E worked closely with the PUC on the symposium, which was canceled after San Bruno officials brought the meeting to light, calling it a "dog-and-pony show" aimed at presenting PG&E in a favorable light.

"This is appalling," Jackson said. "It was our protests that caused the cancellation of that symposium."

The symposium flap is one of numerous instances that suggest close ties between the PUC and PG&E. In some of the emails, PUC President Michael Peevey offered public relations advice to PG&E.

The emails involving the PUC have prompted numerous critics to demand Peevey's ouster.

But in a meeting last week with the editorial board of this newspaper, Gov. Jerry Brown expressed support for Peevey, describing him as "a very effective leader; he gets things done."

San Bruno says that the PUC, under Peevey's leadership, has fostered close ties with PG&E that are improper. "PG&E is pulling the strings at the PUC," Jackson said.